How many interest rate cuts will the Federal Reserve make in 2025?

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By Jack Ferson

With the beginning of the year, analysts prepare their forecasts for Federal Reserve interest rate cuts in 2025. In it Reuters Global Markets Forum the annual meeting of the World Economic Forum in Davos the Guggenheim chief investment officer Anne Walshhas indicated that he hopes clippings for each quarter according to Divya Chowdhury and Bansari Mayur Kamdar en Yahoo Finance.

Walsh expects a reduction to around 75 basis points or even a full percentage point this year.

Trader bets have moved in recent days to just one FED rate cut this year, with chances of a second cut in play, down from at least three a month ago.

“Los duty that incoming President Donald Trump is expected to impose will likely not be as severe as most expect,” Walsh said, “as long as the dollar remains strong as a reserve currency and the United States continues to attract capital.”

Walsh expects that tariffs, on average, increase less than 10% in all areas and that are more specific to each country.

“After a strong bull run through 2022, the bond market is now trading in a range for the third year,” Walsh added, “and the volatility within this range makes it interesting.”

“If we reach 5% on the 10-year bondthat’s extreme, and that’s such an oversold position that it’s a total buying opportunity,” Walsh said, adding that bond yield spreads could remain tight, which will also be good for U.S. stocks.

Walsh expected the stock to gain more with the positive global themes that are developing, such as artificial intelligence (AI), energy and the relocation of manufacturing to the US, with the S&P 500 delivering returns of 8%-10% by the end of 2025.

Walsh warned that there was some uncertainty around Trump’s policies and what his incoming administration will actually implement, and also a risk that the US economy could slow more than currently predicted.

It’s like a game of ping pong… between politics and policiesand that’s going to create a lot of volatility around our (investment) themes this year,” Walsh noted.

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